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Steel production in Pakistan jumped 39.3% to 5 million tons last year, according to World Steel Association. Earlier, Pakistan steel industry ramped up its output from 2.9 million tons in 2015 to 3.6 million tons in 2016.
While Pakistan's steel production growth is the world's fastest, its relatively small steel production volume of 5 million tons ranks it 28th in the world. Other nations seeing strong growth in steel production are Iran (up 21.4%), Vietnam ( 31.9%) and Egypt (35%). Iran ranks 13th with 21.7 million tons; Vietnam ranks 19th with 10.3 million tons; Egypt ranks 23rd with 6.8 million tons produced in 2017.
Some of the key names ramping up production capacity in Pakistan are Aisha Steel Mill (ASM), Amreli Steels and Agha Steel Industries.
ASM, an Arif Habib Group company, is planning to expand capacity to a total of 700,000 tons a year from its current capacity of 220,000 tons.
Amreli Steels Limited, country’s leading steelmaker has announced plans to increase its annual production capacity of reinforcement bars to 750,000 tons a year within the next two years.
|World Steel Production. Source: WorldSteel Association|
The biggest drivers of soaring steel demand in Pakistan are rapidly growing large scale manufacturing and construction sectors.
Car sales shot up 23% while motorcycle sales soared by 20% in January 2018, according to industry data.
The cement sales, a good proxy for construction sector, rose 14.3% in the first 7 months of fiscal 2017-18.
Pakistan is the third fastest growing economy among the top 25 economies in terms of purchasing power parity. Pakistan's economic growth is continuing to accelerate amid rising rising investments led by China-Pakistan Economic Corridor related infrastructure and energy related projects. The IMF sees Pakistan economy growing at 5.6% while the World Bank forecasts it to grow by 5.5% in current fiscal year 2017-18 ending in June 2018, a full percentage point faster than the 4.5% average GDP growth for Emerging and Developing Economies (EMDEs) that include Argentina, Brazil, China, India, Nigeria and Russia among others. However, Pakistan economic growth continues to lag growth forecast for regional economies of India and Bangladesh. The report also calls attention to the expanding current account gap as a matter of concern that must be taken seriously by the government to avoid yet another return to the International Monetary Fund (IMF).